Personal income tax in Lithuania
 and hourly wage at 3,39 Eur...)
From the January 1, 2019, there are changes in personal income tax in Lithuania. New monthly minimal wage is set at 555 Eur (bruto) and hourly wage at 3,39 Eur (bruto).
Progressive personal income tax rates in Lithuania have been introduced as follows:
20 percent for yearly wages below amount of 120 Average Monthly Wages (AMW) for 2019, 84 AMW for 2020 and 60 AMW for 2021.
27 percent for yearly wages above 120 AMW for 2019, 84 AMW for 2020 m. and 60 AMW for 2021.
The AMW varies quarterly and now is 926,7 EUR (ref. 2018, 1st quarter data).
Employee and corporate taxes will be consolidated and Social Security Tax contributions will be transferred to the employee. The salaries of all employees will need to be indexed, i.e. increased by a factor of 1.289. If an employee chooses to add a supplement to his\her pension scheme, the salary should remain the same as it is now, otherwise the salary should be slight higher. The company's salary costs should remain the same. See example below:
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2018 |
2019 |
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Salary – 1000 EUR |
Salary – 1289 EUR |
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Employer Taxes |
Employee Taxes |
Employer Taxes |
Employee Taxes |
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Soc. tax 31.18% - 312 EUR |
Soc. tax 9% - 90 EUR |
Soc. taxes 1.47% - 19 EUR |
Soc. taxes 19,5% - 251 EUR |
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Guarantee Fund 0.16% - 2 EUR |
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Personal Inc. Tax 15% - 150 EUR |
Long-term work payout fund 0.16% - 2 EUR |
Personal Inc. Tax 20% - 258 EUR |
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Bruto – 760 EUR |
Bruto – 780 EUR |
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Workplace expenses – 1312 EUR |
Workplace expenses – 1312 EUR |
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15% Personal Inc. Tax will continue to apply to sickness benefits, dividend income, other non-employment related income (e.g. sales revenue from property, rental of property, interest, royalties, donations, gifts, etc.) not exceeding 120 AMW per year, otherwise - 20%.
Income Tax Exemption rate (ITER) will change annually. As it is not yet clear what minimum monthly salary will come into force from 2019, it is not possible to calculate the exact ITER for 2019. However, the indexation of salaries and the renewed calculation of ITER will have the greatest impact on the least-paid employees - their bruto salary should slightly increase.
Social Security Tax ceilings will be introduced to income exceeding 120 AMW per year (about 8,800 Eur per month bruto). In 2020, the limit will be reduced to 84 AMW per year, in 2021 - up to 60 AMW per year.
Social Security Tax floors will not be applied to workers with a working capacity of 0-55%. Also, those employees who received maternity, paternity or child care benefits during that month, as well as those who have been paid disability benefits or pension.
Sickness benefits payable by the employer for the first two days of illness will be subject to a 15% Personal Inc. Tax rate. So far, the sickness benefit has been comprised between 80% and 100% of the employee's average salary (AS). The sickness benefit will range from 62.06% to 100% of the employee's AS. This change is due to the indexation of wages.
To find out more about personal income tax in Lithuania, please contact our lawyers at info@gencs.eu
T: +371 67240090
F: +371 67240091